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Iusacell interest in Panama license auction brings bidders to 14

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This brings the total number of possible bidders to 14, adding to America Movil, France's Orange, Luxembourg's Millicom International Celular, Jamaica based Digicel and US group Vitel, as well as Panamanian firms Vtel, Global Star, Clarocom, Cable Onda, Advanced Communication, Innovation Wireless, Torres Troncales and Pan American Wireless.

It is the second time Iusacell has looked at expanding overseas, having bid for a license in Peru in July this year.

The government expects to raise at least US$36mn for each new 20-year concession awarded, according to the Mexican papers.

Iusacell's interest in bidding comes despite an outstanding debt of US$1bn, according to local press reports this week. Iusacell CEO Gustavo Guzman described the debt load as manageable, adding that it reached this proportion due to the purchase of fellow Mexican mobile operator Unefon earlier this year.

Guzman believes Iusacell's revenue stream is high enough to make adequate payments on the outstanding debt, the report said. The company has said it expects 10-15% annual revenue growth.

Auction Schedule

Asep is scheduled to put the bidding rules on sale October 21 and will respond to consultations about the prequalification process during November and December. The regulator will accept prequalification applications from January 28 and expects to announce prequalifiers on February 27. The auction itself will start with reception of financial offers on April 19 and winners will be announced on May 21.

Incumbent mobile operators Cable & Wireless Panama (C&WP) and Movistar Panama have questioned whether their exclusivity ends after 10 years, as marked by October 23, 2007, or after 11 years, since the wording of their concession contracts is "exclusivity until the 11th year."

However, since the license winners are not to be announced until May and will then require several months for network buildout, the timing of the auction could be a moot point.

C&WP has a 58% market share.

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Tags: digicel  movistar  iusacell  millicom international  millicom  Panama